Nursing Homes, HHS on Collision Path Over Staffing Mandate

The Biden administration’s push to improve nursing home care through better staffing—and the industry’s insistence that it needs more workers and funding to make it happen—could set the stage for intervention by Congress or the courts.

“We will vigorously defend our nursing home members by any means necessary,” said a statement from Rachel Reeves, spokesperson for the American Health Care Association, the nursing home industry’s largest trade group. “We are exploring all our options.”

The nursing home staffing rule (RIN 0938-AV25) issued this week requires all Medicare- and Medicaid-certified facilities to have 3.48 “hours per resident day” (HPRD) of total staffing, according to a White House fact sheet. The original proposal called for only 3.0 HPRD. HPRD is the “total number of hours worked by each type of staff divided by the total number of residents,” according to the Centers for Medicare & Medicaid Services.

Under the rule, registered nurses must provide 0.55 HPRD toward the mandate, while nurse aides must provide 2.45 HPRD. Facilities can use any combination of RNs, licensed practical nurses, or nurse aides to account for the additional 0.48 HPRD.

“This means a facility with 100 residents would need at least two or three RNs and at least ten or eleven nurse aides as well as two additional nurse staff (which could be registered nurses, licensed professional nurses, or nurse aides) per shift to meet the minimum staffing standards,” according to the fact sheet.

The CMS estimates the industry would pay about $40.6 billion over 10 years to implement the requirements. An AHCA comment letter on the rule when it was first proposed cited legal arguments for why the requirements should be rescinded. The letter said the CMS “lacks the statutory authority to promulgate the proposed minimum-staffing requirements.”

Improper Taking?

“But the government has a lot of advantages when it deals with arguments about challenges to its statutory authority,” said Judy Waltz, partner and co-chair of the health-care practice group at Foley & Lardner, San Francisco.

A former HHS attorney, Waltz said courts have been deferential to federal agencies’ authority to implement policies through the notice-and-rulemaking process.

However, the mandate’s added labor costs for providers could be used to support a constitutional argument of “improper taking” of nursing homes’ ability “to have an economically viable entity by virtue of requirements that are not shown to be clinically necessary,” Waltz said. It would be hard, however, to “show that there’s a constitutional standard that’s been violated,” she said.

Another pathway for a legal challenge might be to claim the staffing requirements are “arbitrary and capricious” because they haven’t been shown to have a demonstrable clinical benefit, Waltz said. “Just having more people there, I think we don’t have evidence that that’s going to result in better care necessarily,” Waltz said.

Other possibilities for stopping implementation of the rule include a “Congressional Review Act resolution of disapproval to overturn” it, “which we would support,” said a statement from Katie Smith Sloan, president and CEO LeadingAge, which represents nonprofit aging services providers.

The group would also consider “using the congressional appropriations process to block funding for the rule’s implementation,” Sloan said.

Turning to Congress

Reeves said the AHCA will also work with Congress on advancing the Protecting America’s Seniors’ Access to Care Act (H.R. 7513), which would block the staffing mandate.

The measure is among nearly 20 bills that are scheduled to be discussed at an April 30 House Energy and Commerce subcommittee hearing on strengthening Medicaid.

Sen. Deb Fischer (R-Neb.) said in a statement Tuesday that the administration ignored bipartisan opposition to the rule and “decided to plow ahead. This misguided rule will devastate nursing homes across this country and worsen the staffing shortages.”

Roughly 25% of US nursing homes could be granted exemptions from the staffing requirements, HHS officials said in a briefing with reporters Tuesday. Officials downplayed industry concerns that the requirements would cause some facilities to turn away patients and ultimately close due to labor shortages.

Stephen A. Moses, visiting fellow at the conservative Paragon Health Institute, said low reimbursement rates from Medicaid, the nation’s leading payer for long-term care, are driving the industry’s financial struggles.

In roughly 80% of nursing homes in 2019, Medicaid payment rates did not cover the cost of care, according to the Medicare Payment Advisory Commission.

But because Medicaid payment and cost data for nursing homes was incomplete and variable across states, the Medicaid and CHIP Payment and Access Commission recommended that all Medicaid provider payments be collected and reported consistently for a more complete accounting of how Medicaid payments compare to nursing home costs, a MedPAC analyst said in December.